1.

INTERSTATE ESTATE OF TY v CA He claimed in both cases that even if said property were placed in the name
GR NO. 112872 of deceased Alexander, they were acquired through his money, without any
APRIL 19, 2001 cause or consideration from deceased Alexander.
By: CHESKA DOMINGUEZ ● Sylvia filed MTDs alleging lack of jurisdiction of the trial court, and that SEC
Topic: KINDS OF IMPLIED TRUST has jurisdiction. Other grounds raised include (1) express trust between
Petitioners: THE INTESTATE ESTATE OF ALEXANDER T. TY, represented by the father Alejandro and son Alexander (2) statute of limitation (3) failure to
Administratrix, SYLVIA S. TY include certification of NFS (4) laches. (civpro pa more)
Respondents: COURT OF APPEALS, ● MTD denied. Sylvia appealed to the CA but was denied.
HON. ILDEFONSO E. GASCON, and ALEJANDRO B. TY ● Hence, this petition. Sylvia contends that Alejandro is attempting to enforce
Ponente: MELO, J. an unenforceable express trust over the disputed real property.
● Alejandro contends that the pieces of property were transferred in the name
of the deceased Alexander for the purpose of taking care of the property for
RECIT-READY: Alexander died. Sylvia, his wife, filed petition to sell or mortgage estate him and his siblings. Such transfer having been effected without cause of
property in the estate. Alejandro, father of the deceases, filed two complaints to consideration, a resulting trust was created.
reconvey the subject properties to be sold or mortgaged by Sylvia. Sylvia filed MTD on ● In short, Sylvia argued that there was an express trust, while Alejandro holds
the ground of prescription, among others, but denied. CA denied her appeal. SC ruled that there was a resulting trust.
that there being an express trust, no prescription may be attached.
ISSUE:
DOCTRINE: As a general rule, resulting trusts do not prescribe. The exception is when (1) WON there was an express trust?
the trustee repudiates the trust. ● NO. There was a resulting trust as correctly argued by Alejandro.
● A resulting trust arises in favor of one who pays the purchase money of an
FACTS: estate and places the title in the name of another, because of the
● Petitioner Sylvia Ty was married to Alexander Ty, son of private respondent presumption that he who pays for a thing intends a beneficial interest therein
Alejandro Ty. Alexander died of leukemia and was survived by his wife Sylvia, for himself. The trust is said to result in law from the acts of the parties. Such
and one child. In the settlement of his estate, petitioner was appointed a trust is implied in fact.
administratrix of her late husband's intestate estate. ● If a trust was then created, it was an implied, not an express trust, which may
● Petitioner filed a motion for leave to sell or mortgage estate property in order be proven by oral evidence (Article 1457, Civil Code), and it matters not
to generate funds for the payment of deficiency estate taxes in the sum of whether property is real or personal.
P4M. The inventory included several shares of stocks in different companies
and a parcel of land. (2) WON the action of Alejandro is barred by prescription?
● Private respondent Alejandro filed two complaints before the RTC ● NO. Resulting trusts generally do not prescribe, except when the trustee
(1) for the recovery of the said properties, praying for the declaration of repudiates the trust.
nullity of the deed of absolute sale of the shares of stock executed by ● An action to reconvey will not prescribe so long as the property stands in the
Alejandro in favor of the deceased Alexander name of the trustee.
(2) for the recovery of the pieces of property that were placed in the name of
deceased Alexander by Alejandro, the same property being sought to be sold ALEJANDRO WON. PETITION DENIED.
out, mortgaged, or disposed of by Sylvia.
NOTES:
 ● Issue on jurisdiction is moot and academic since cases re intra-corporate made later; the reason that the “transaction being from brother to
controversies have been transferred to RTC. brother”;
● No laches. Alejandro filed only a month after Sylvia filed petition to mortgage o TCT for said lot was issued to "Lucas, married to Luisa";
etc. o Lucas' possession of the title to the lot, in trust for Emilio, was
acknowledge by the respondents.
o From the time Emilio bought the lot from Lucas, the latter had been
collecting all its rents for his own use as financial aid to him as a
brother; Lucas had been giving part of the rents to Fortunata (2nd
wife of Emilio).
o Lucas died; and survived by the respondents, who are still in
possession of the lot, having refused to reconvey it to Ester.
● Respondents filed MTD, alleging that:
o Ester's cause of action was unenforceable under the NCC and
o The action has already prescribed.
● Trial court granted the MTD and held that:
o An express trust was created based from the facts alleged, which
was unenforceable without any writing; and
2. HEIRS OF CANDELARIA vs ROMERO o Since the TCT was issued to Lucas about 38 years before the filing of
By: SG / G.R. No. L-12149 / September 30, 1960/ Ponente: Gutierrez, J. the complaint, the action has already prescribed.
Topic: KINDS OF IMPLIED TRUST: RESULTING TRUST
Petitioner: HEIRS OF CANDELARIA Issues/Ruling:
Respondent: LUISA ROMERO and HEIRS OF LUCAS CANDELARIA WHETHER AN EXPRESS TRUST WAS CREATED (NO)
Doctrine: Where property was taken by a person under an agreement to hold it for, or ● The trust alleged to have been created was an Implied trust.
convey it to another or the grantor, a resulting or implied trust arises in favor of the o Where property was taken by a person, under an agreement to
person for whose benefit the property was intended. hold it for, or convey it to another or the grantor, a resulting or
implied trust arises in favor of the person for whose benefit the
Facts: property was intended.
● Ester Candelaria (in behalf of herself and of Emilio Candelaria’s heirs) filed a ● An Implied trust arises where a person purchases a land with his own money
complaint for reconveyance of realty against Luisa Romero, alleging that: and takes a conveyance in the name of another.
o Emilio (alleged beneficiary) and his brother Lucas (alleged trustee), ● The property is held on a resulting trust in favor of the one furnishing the
each bought a lot on installment basis. consideration for the transfer.
o Lucas paid the first 2 installments to his lot; ● The trust, which results under such circumstances, does not arise from
o Lucas sold his interest to Emilio, who then reimbursed him the agreement, but from the facts and circumstances. It results because of equity
amount he already paid; and arises by implication or operation of law.
o Lucas continued to pay the remaining installments; ● In this case, although Lucas had no more interest over the lot, the subsequent
o Although Lucas had no more interest over the lot, the subsequent payments made by Emilio, were made in the name of Lucas, with the
payments made by Emilio were made in the name of Lucas, with the understanding that the necessary documents of transfer will be made later,
understanding that the necessary documents of transfer will be the reason that the “transaction being brother to brother."
 ● It is apparent that Emilio intended to obtain a beneficial interest in the lot. ● Francisco Burcena and Mariano Burcena (respondents), together with their mother,
● Lucas acquired the lot, under circumstances which show that it was conveyed Dominga, filed a complaint for annulment of document with damages against
to him on the faith of his intention to hold it for, or convey it to the grantor Salvador Comilang. The complaint alleges:
(the petitioners’ predecessor in interest). o That respondents are the owners of a parcel of land and the house built
thereon;
WHETHER ESTER’S ACTION HAD ALREADY PRESCRIBED (NO) o respondents acquired the subject property through their earnings while
● Continuous recognition of a resulting trust, precludes any defense of laches working abroad;
in a suit to declare and enforce the trust. o the subject property was declared for taxation purposes in Dominga's name
● The beneficiary of a resulting trust may, without prejudice to his right to as administrator thereof;
enforce the trust, prefer the trust to persist and demand no conveyance from o petitioner caused the execution of a Deed of Donation over said property by
the trustee. taking advantage of Dominga's blindness, old age and physical infirmity; the
● In this case, it was alleged that Lucas held the title to the lot, merely in trust said Deed of Donation is null and void because:
for Emilio, and was acknowledged by the respondents. ▪ (a) Dominga had no right to donate the same since she is not its owner
● Such allegation was hypothetically admitted. ▪ (b) Dominga did not give her consent and was misled to the execution of
● The interest of justice would be better served if Ester and her alleged co-heirs such document
were to be given an opportunity to be heard and allowed to present proof in ▪ (c) granting Dominga had authority to donate, the donation is void
support of their claim. because the property donated is the only property declared in her name
and therefore she could not have reserved for herself in full ownership
Wherefore, the order of dismissal appealed from is hereby reversed and the case sufficient property to support herself;
remanded to the court a quo for further proceedings. So ordered without costs. o petitioner is in possession of the subject property, depriving respondents of
its ownership and enjoyment of its fruits.
3. Comilang v Burcena ● In his Answer, petitioner contends that the Deed of Donation was freely and
GR No. 146853 voluntarily executed by Dominga; the subject property was acquired by Dominga
February 13, 2006 together with her two sisters; Dominga erected a house on the land; Dominga
By: Happy financed out of her own money the construction of the house and subsequent
Topic: Kinds of Implied Trust (1448) improvements thereof; granting that respondents had been sending money to
Petitioner: Salvador Comilang Dominga, said money already belonged to her; if Dominga used said money for
Respondents: Francsico Burcena and Mariano Burcena improving the house, respondents have no right over the house.
Ponente: Austria-Martinez, J. ● Dominga died during the pendency of the case.
● RTC ruled in favor of the respondents. Donation is void.
Doctrine: Elements of purchase money resulting trust under first sentence of Article ● CA affirmed RTC. It held that the case involves an implied trust known as purchase
price resulting trust under Article 1448 of the Civil Code where property sold is
1448:
granted to one party but the price is paid for by another; and that Dominga's act of
(a) an actual payment of money, property or services, or an equivalent,
donating the property to petitioner was beyond her authority and capacity, done
constituting valuable consideration; and
without the consent of the real owners, herein respondents. Thus, the CA sustained
(b) such consideration must be furnished by the alleged beneficiary of a
the conclusion of the RTC that the donation is void.
resulting trust.
● Petitioner’s MR was denied.
Facts:
 ● Hence, this petition. Petitioner assails the CA's application of the principle of implied SUMMARY: Pet Darby owns a business and he hired resp Mendoza as his employee.
trust to nullify the Deed of Donation executed in his favor. Pet Darby then bought shares in Alabang Country Club (SCC) and placed the same in
the name in of resp Mendoza since the shares cannot be placed under the name of
Issue: W/N implied trust exists between respondents and Dominga in relation to the his (pet Darby) company. Resp Menodza then retired. Pet Darby later found a buyer
subject property and therefore Dominga had no right to donate the same to petitioner of the shares he bought, but he was advised that he needed the consent of resp
Mendoza to which the latter refused to give saying that he owned the shares and
Ruling: YES that he was still unpaid by pet of his benefits. Hence, the case. The issue is WON
Art. 1448.There is an implied trust when property is sold, and the legal estate is THERE WAS A TRUST BETWENE THE 2? SC said YES because (read doctrine). In the
granted to one party but the price is paid by another for the purpose of case, it was pet Darby who bought the shares evidenced by the deed of sale from
having the beneficial interest of the property. The former is the trustee, ACC. Hence, pet won.
while the latter is the beneficiary. However, if the person to whom the title
is conveyed is a child, legitimate or illegitimate, of the one paying the price DOCTRINE: In Thomson v. Court of Appeals , we held that a trust arises in favor of
of the sale, no trust is implied by law, it being disputably presumed that one who pays the purchase price of a property in the name of another, because of
there is a gift in favor of the child. the presumption that he who pays for a thing intends a beneficial interest for himself.
● The trust created under the first sentence of Article 1448 is sometimes referred to
as a purchase money resulting trust, the elements of which are: FACTS
o an actual payment of money, property or services, or an equivalent, 1. Petitioner Sime Darby Pilipinas, Inc. (Sime Darby) employed Jesus B.
constituting valuable consideration; and Mendoza (Mendoza) as sales manager.
o such consideration must be furnished by the alleged beneficiary of a resulting 2. Sime Darby bought a Class "A" club share in Alabang Country Club (ACC)
trust. from Margarita de Araneta
● Respondents have shown that the two elements are present in the instant case. 3. The share, however, was placed under the name of Mendoza in trust for
Dominga was merely a trustee of the respondents in relation to the subject property. Sime Darby since the By-Laws of ACC state that only natural persons may own a club
Therefore, Dominga could not have validly donated the subject property to share.
petitioner, as expressly provided in Article 736 of the Civil Code 4. When Mendoza retired, Sime Darby fully paid Mendoza his separation pay
Petition DENIED. amounting to more than P3,000,000.
5. Nine years later, or sometime in July 2004, Sime Darby found an interested
Note: Dominga told Margarita (witness) that respondents sent her money to buy the buyer of the club share. Before the sale could push through, the broker required Sime
subject property. Darby to secure an authorization to sell from Mendoza since the club share was still
registered in Mendoza's name. However, Mendoza refused to sign the required
04 SIME DARBY PILIPINAS v MENDOZA authority to sell or special power of attorney unless Sime Darby paid him the amount
G.R. No. 202247 of P300,000, claiming that this represented his unpaid separation benefits. As a
DATE: June 19 2013 result, the sale did not push through and Sime Darby was compelled to return the
BL payment to the prospective buyer. Hence, Pet Darby filed a case against resp
Topic: Implied Trust Mendoza
Petitioner: SIME DARBY PILIPINAS, INC 6. CONTENTION OF RESP: Mendoza filed an Answer alleging ownership of the
Respondents: JESUS B. MENDOZA club share. Mendoza stated that Sime Darby purchased the Class "A" club share and
Ponente: Carpio, J. placed it under his name as part of his employee benefits and bonus for past
exemplary service. Mendoza also alleged that when he retired in 1995, Sime Darby
 failed to give some of his retirement benefits amounting to P300,000. DOCTRINE: Article 1450 presupposes a situation where a person, using his own funds,
purchases a certain piece of land in behalf of another who, in the meantime, may not
ISSUE: WON THERE WAS AN IMPLIED (RESULTING) TRUST BETWEEN PET DARBY AND have sufficient funds to purchase the land. The property is then transferred in the
RESP MENDOZA? YES! name of the trustee, the person who paid for the land, until he is reimbursed by the
beneficiary, the person for whom the land is purchased.
HELD:
7. In Thomson v. Court of Appeals , we held that a trust arises in favor of one FACTS:
who pays the purchase price of a property in the name of another, because of the ● Petitioner is Imelda Nakpil, wife of Pinggoy Nakpil. Private Respondent is
presumption that he who pays for a thing intends a beneficial interest for himself. Carlos Valdes, best friend of Pinggoy. Pinggoy drowned at a beach house in
8. In the case, while Sime Darby paid for the purchase price of the club share, Bataan. Now the subject matter in this dispute is the ownership of Pulong
Mendoza was given the legal title. Thus, a resulting trust is presumed as a matter of Maulap, a summer residence in Moran Street, Baguio City.
law. ● Petitioner, Imelda Nakpil, instituted an action for reconveyance with
9. The burden then shifts to the transferee to show otherwise While the share damages for breach of trust before the Regional Trial Court of Baguio City
was bought by Sime Darby and placed under the name of Mendoza, his title is only against respondents Carlos Valdes and Caval Realty Corporation based on
limited to the usufruct, or the use and enjoyment of the club's facilities and privileges Article 1450 of the NCC.
while employed with the company. ● From the records, it appears that Valdes bought the residence for P150,000
10. It can be gathered then that Sime Darby did not intend to give up its and a deed of sale was executed in his name. The Nakpils moved and stayed
beneficial interest and right over the share. The company merely wanted Mendoza to at the residence.
hold the share in trust since Sime Darby, as a corporation, cannot register a club PETITIONER’S ARGUMENTS
share in its own name under the rules of the ACC. At the same time, Mendoza, as a ● She alleged in her complaint that her husband Pinggoy Nakpil prior to his
senior manager of the company, was extended the privilege of availing a club death had requested Valdes to purchase Pulong Maulap and thereafter
membership, as generously practiced by Sime Darby. register the sale and hold the title thereto in trust for him (Pinggoy Nakpil),
which Valdes did.
RULING: WHEREFORE, we GRANT the petition. We SET ASIDE the 30 March 2012 ● However, after Pinggoy’s death, Valdes concealed all information regarding
Decision and 6 June 2012 Resolution of the Court of Appeals in CA-G.R. CV No. 89178. the trust agreement. Instead, he transferred the residence in the name of
We REINSTATE the 30 April 2007 Decision of the Regional Trial Court of Makati City, respondent Caval Realty Corporation, which is 99.7% owned by him.
Branch 132 in Civil Case No. 05-821. SO ORDERED. RESPONDENT’S ARGUMENTS
● Respondent denied the existence of any trust agreement.
5. IMELDA NAKPIL V. IAC ● He averred that he bought the summer residence for himself with his own
G.R. No. 74449 funds, and without any participation of the late Nakpil.
August 20, 1993 ● Considering their friendship, Valdes offered the usufruct of the property to
BY: JUSTINE LIMJOCO the Nakpils who in turn shouldered its maintenance expenses, real estate
taxes, and other premiums.
PETITIONER: Imelda A. Nakpil ● Regional Trial Court rendered a decision holding that a trust relationship
RESPONDENT: Intermediate Appellate Court, Carlos J. Valdes and Caval Realty existed since facts show that the payment given by Valdes for the property
Corporation was also considered a loan to Nakpil.
PONENTE: BELLOSILLO, J. ● The IAC reversed the decision of the Trial Court.
 July 1978, the amount advanced by Valdes for the purchase of the Pulong Maulap
ISSUE/S: being a conditio sine qua non for compelling conveyance.
1. Whether Art. 1450 of the Civil Code applies
2. Whether the petitioner can still compel reconveyance of Pulong Maulap from The period within which to compel conveyance of Pulong Maulap is not
respondent Valdes. imprescriptible. The rule is well-settled that an action for reconveyance based on an
implied or constructive trust prescribes in ten (10) years. But, in the case, petitioner
HELD: could still compel conveyance of the disputed property from respondent provided the
1. Yes there was a constructive trust between the parties under Art. 1450. former reimburses the latter for all his expenses. Valdes never repudiated the
Consequently, respondent Valdes is estopped from claiming that he bought Pulong constructive trust during the lifetime of the late Jose Nakpil. On the contrary, he
Maulap for himself, and not merely in trust for the late Nakpil, as this contention is expressly recognized it. The prescriptive period therefore did not begin to run until
belied by the following facts: after he repudiated the trust. And such repudiation came when Valdes excluded
● Loans while in his name (Valdes) were obtained by late Nakpil Pulong Maulap from the list of properties of the late Jose Nakpil submitted to the
● Mortgage of the vendors with PNB liquidated from proceeds of loan obtained intestate court in 1973. Even then, the present action for conveyance was filed in 1979
were actually secured by late Napkil merely using respondent’s name. or well within the ten-years period.The trust relations between the parties were
● Loan made by Nakpil was used to finance repair and renovation of Pulong therefore never extinguished. Besides, petitioner could not have waived the interest
Maulap. of her children with the late Jose M. Nakpil who are her co-heirs to the Nakpil estate.
● Down payment for property came from personal fund of Valdes which he
considered as advances to late Napkil.
● Payment being tendered, while remitting payment of real estate taxes was
made “on behalf” of the Napkil’s, which is an express recognition of the
implied trust

Implied trusts, which may either be resulting or constructive, are those which, without
being express, are deducible from the nature of the transaction as matters of intent, 6. Nito vs CA
or which are superinduced on the transaction by operation of law as matter of equity, GR NO. 102657
independently of the particular intention of the parties. Article 1450, which petitioner August 9, 1993
invokes in the case at bar, is an illustration of an implied trust which is constructive. By: Madrid
Article 1450 presupposes a situation where a person, using his own funds, purchases a
certain piece of land in behalf of another who, in the meantime, may not have Topic:
sufficient funds to purchase the land. The property is then transferred in the name of Petitioners: Feliciano Nito
the trustee, the person who paid for the land, until he is reimbursed by the beneficiary, Respondents: CA, Conrado Villarama, Agricultural Credit Administration/ Land Bank,
the person for whom the land is purchased. It is only after the beneficiary reimburses Candido Milan, Sps. Renato & Angelita Carlos
the trustee of the purchase price that the former can compel conveyance of the Ponente:
purchased property from the latter.
DOCTRINE: For an implied trust to be created, the parties must agree on the purchase
2. Yes, petitioner may redeem and compel conveyance of the disputed property but of property and must consent that only 1 should take title for everyone’s benefit.
only after reimbursing respondent the sum of P375,056.64, with legal interest from 31
FACTS:
- Agricultural Credit Administration (Land Bank) owned 3 parcels of land in Bulacan.
Nito used to lease a portion of the said lots but when the lease expired, ACA put it up
for sale at public auction. Respondents (Villarama, Carlos, et al) expressed interest and ISSUE:
they organized themselves as a group and appointed a representative (Villarama). Each W/N Nito’s deposit of 10k to Villarama made the latter his trustee?
member contributed money as bid bond yet Nito, who was part of said group, did not.
- Villarama was the only bidder. The bid bond was withdrawn and redeposited as HELD/RATIO:
performance bond. The group, in their manifesto, also authorized Villarama to NO.
negotiate with ACA for the purchase of the property. Nito was not a signatory but he - Article 1452 presupposes the concurrence of two requisites before an implied or
gave Villarama a cash deposit of 10 K. resulting trust can be created. First, that two or more persons agree to purchase a
- Villarama and ACA agreed to a purchase price of P1,600,000.00 to be paid in full on property and Second, that they consent that one should take the title in his name for
or before March 16, 1982, lest the cash deposit would be forfeited as liquidated everyone's benefit.
damages. - There is no showing that Nito had agreed to join the group organized to purchase the
- The group's counsel sent Nito a letter dated March 8, 1982, asking for full payment parcels of land from ACA. Rather, the evidence shows that while he was offered to join
of the lot he intended to purchase and informing him that his failure to pay for his the group, he rejected the offer because of a disagreement on the frontage of the
share would be construed as lack of interest to purchase the lot. He was advised that portion to be allotted to him and he preferred to negotiate directly with ACA. Also, he
the group would be compelled to look for a substitute buyer in case be failed to pay. did not contribute to the bid bond nor did he sign the manifesto.
- On the group meeting, they all paid their respective shares except Nito. He did not - It was implicit in the March 8, 1982 letter to petitioner that failure on the part of the
pay because he was being given a lot with a 12 m frontage when he wanted one with group to pay the full amount of the purchase price within the deadline set by ACA
32 m. What he did was tender a check in payment to ACA which the latter did not would mean the cancellation of the sale of the property to the group and the forfeiture
accept. of its cash deposit.
- ACA extended the deadline. The night before the deadline, the group, through - His claim that he did not receive such is belied by the return card signed by his wife.
Villarama, offered Milan the lot allocated to Nito in the event the latter would not pay - While it, is true that petitioner gave Villarama P10,000.00 as deposit, the deposit was
for his share. Milan accepted. The group waited for Nito but he failed to pay and appear conditioned on his being given a lot with a frontage of 32 meters, not one with a
so they used Milan's money to help pay the purchase price. ACA then issued a deed of frontage of only 12 meters as was offered to him by the group.
sale to Villarama who caused the issuance of corresponding deeds of sale and TCTs to
the individual buyers. 7. Cuaycong vs. Cuaycong
- Nito filed a complaint for reconveyance of property, alleging fraud and breach of GR NO. L-21616
trust. RTC dismissed the case. CA affirmed. December 11, 1967
- Nito contends that:
(a) his deposit of P10K to Villarama as partial payment for the parcel of land he Topic: Implied Trust
intended to purchase made Villarama his trustee in accordance with Article 1452; Petitioners: Gertrude
(b) by virtue of his deposit, he became a co-purchaser or co-owner of the property, Respondents: Luis
thus his non-payment of his full share on the purchase price amounting to P135,000.00 Ponente: BENGZON
should not result in the forfeiture of his right as co-purchaser and that any act of the
group should redound to his benefit; Doctrine
(c) as a co-owner of an individual share, the group cannot deprive him thereof and give A trust must be proven by clear, satisfactory, and convincing evidence. It cannot rest
it to Milan. The only recourse that the group had was to ask him to contribute to the on vague and uncertain evidence or on loose, equivocal or indefinite declarations
expenses for the preservation of the property and the purchase price. and may not be proved by parole evidence As a rule, however, the burden of proving
the existence of a trust is on the party asserting its existence, and such proof must de Leon, who died in 1941, had an understanding and made arrangements with
be clear and satisfactorily show the existence of the trust and its elements. defendant Luis D. Cuaycong and his father, Justo Cuaycong, that it was their (Eduardo's
and Clotilde's) wish and desire, that Hdas. "Sta. Cruz," and "Pusod" above-referred to,
If the intention to establish a trust is clear, the trust is express; if the intent to should be divided between the brothers and sister of Eduardo Cuaycong, namely,
establish a trust is to be taken from circumstances or other matters indicative of such Justo, Meliton, Lino and Basilisa, all surnamed Cuaycong, and his wife, Clotilde de
intent, then the trust is implied. Leon.”

FACTS Said complaint also provides

The surviving children and grandchildren of Lino Cuaycong, brother of deceased “pursuant to such wish and desire and arrangements, the said Eduardo Cuaycong, with
Eduardo Cuaycong filed a suit against Justo, Luis and Benjamin Cuaycong for the knowledge and consent of his wife, Clotilde de Leon, and as an agreement with the
conveyance of inheritance and accounting. latter to effectuate their wish and desire had directed his brothers and sister to pay his
wife the sum of P75,000.00, the value of the two haciendas above-mentioned being
Alleging that Eduardo Cuaycong had on several occasions, made known to his brothers P150,000.00, and then divide the same among themselves share and share alike; or, at
and sisters that he and his wife Clotilde de Leon (died in 1940) had an understanding all events, should his brothers and sister fail to do just that, they should divide only the
and made arrangements with Luis Cuaycong and his father Justo Cuaycong, that it was one-half (1/2) portions proindiviso thereof appertaining to him (Eduardo) in the
their desire to divide Haciendas Sta. Cruz and Pusod among his brothers and sister and conjugal properties.”
his wife Clotilde. Such being the case, it is clear that the trustor expressly told the defendants of his
intention to establish the trust.
As the two haciendas were the subject of transactions between the spouses (Eduardo
Cuaycong and Clotilde de Leon) and Justo and Luis Cuaycong, Eduardo told Justo and 8. MALINCON v. DE VERA
Luis, and the two agreed, to hold in trust what might belong to his brothers and sister GR NO. L-1717
as a result of the arrangements and deliver to them their share when the proper time April 17, 1950
comes. By: Bea Nicor
Topic: TRUSTS – Kinds of Implied Trusts
As far back as 1936 Lino demanded from Justo and Luis his share and especially after Petitioners: JUANA MANLINCON and JACINTO (alias Marcelo) DE GUZMAN
Eduardo's and Clotilde's death, the plaintiffs demanded their shares and it was always Respondents: MAGNO DE VERA and CONSTANCIA URMAZA
unheeded. Defendants made it appear that the land was always possessed by Luis Ponente: PARAS, J

ISSUE
DOCTRINE: There is implied trust when a purchaser who obtains a certificate of title in
WON an express trust was made over the properties in question
his name knows that the ownership of the property actually belongs to another.
HELD/RATIO
FACTS:
● The subject property is a fishpond situated in Pangasinan, which formerly
Yes. An express trust was made over the properties in question.
belonged to the conjugal partnership of Domingo Manlincon and Maxima Arenas.
● In 1930, Manlincon died. Maxima Arenas sold the property to spouses Magno De
The intention of the trustor may be seen in the complaint:
Vera and Constancia Urmaza.
“on several occasions during the later years of Eduardo and Lino Cuaycong, the former
● Moises and Francisca Manlincon, children of Domingo in his first marriage, signed
made known to the latter and to their brothers and sister, that he and his wife, Clotilde
the deed of sale as witnesses.
● The sale was registered and a Torrens certificate was issued in the name of PONENTE: LEONARDO-DE CASTRO, J.
spouses De Vera. At that time, Juana Manlincon, the only surviving child of Doctrine: an action for reconveyance of realty, based upon a constructive or implied
Domingo Manlincon and Maxima Arenas, was still a minor. trust resulting from fraud, may be barred by prescription. The prescriptive period is
● After some time, Juana Manlincon and her husband filed a case for reconveyance reckoned from the issuance of the title which operates as a constructive notice.
of the property.
● The CFI ruled that that the sale was valid as far as the share of Maxima was FACTS:
concerned. It rejected the theory of Juana that the sale was tainted with fraud · Canuta Soblingo had a lot in Iloilo which was adjudicated to her on 1917. Canuta
because Maxima and Magno had a passionate relationship. then sold it to Sps. Patricio Sinaon and Julia Sualibio for 2,000. Canuta was Julia’s
● However, the trial court awarded the judgment in favor of Juana on the ground lola.
that Magno knew that the fishpond belonged to the conjugal properties of the · The Sinaons, with their children, paid their respective taxes for the land and
spouses. Magno also knew that upon the death of Domingo, Juana succeeded the have possessed he land from 1923 up to 1985, more than 50 years.
right of her father in the ownership of the fishpond. o However, Canuta was one of the 5 children of Domingo Somblingo, the alleged
● CFI also held that there was a sort of special trust in which Juana Manlincon, in original owner of the lot when it was not yet registered.
conjunction with the children of the first marriage, Moises and Francisca · Sorongon theorized is that Canuta and Sinaons were trustees of the lot and the
Manlincon, was the beneficiary and the defendant Magno de Vera, the trustee. heirs of Domingo are entitled to 4/5 share. This theory was held by both the TC
and CA.
ISSUE / HELD: · The TC ordered Sinaons to convey the 4/5 share to the other heirs. Sinaon
appealed but was denied hence this case.
(1) WON there was implied trust between Juana and Magno
ISSUES: WON an action for reconveyance based on implied would lie after being held
YES. The SC affirmed the decision of the CFI. by supposed trustees for 40 years - YES
● Magno de Vera, with his admitted knowledge of the facts about the ownership
of the property, could not be in a better situation than that of Maxima Arenas if HELD/RATIO:
the latter had registered it in her own name. · SC held that after the Sinaons had appeared to be registered owners of the lot
● As stated in Gayondato vs. Treasurer of the Philippine Islands, Magno de Vera for more than 40 years and possessed it therein, their title had become
may be considered as a trustee, not in its technical sense, but for a want of a indefeasible and had undisturbed possession. Any pretension as to the existence
better term. of an implied trust should not be allowed.
· The trustors had died long ago hence an attempt to prove the trust was made
The appealed judgment is therefore affirmed, and it is so ordered with costs against by unreliable oral evidence. The title and possession of the Sinaons cannot be
the appellants. defeated by oral evidence which can be fabricated.
· There was no express trust in this case. Express trust regarding real property
9. SINAON VS. SORONGON cannot be proven by parol evidence. An implied trust cannot be established
GR NO. L-59879 contrary to the recitals of a Torrens title, upon vague and inconclusive prood.
MAY 13, 1985 · Even assuming that there was implied trust, Sorongon’s action is barred by
BY: Ryan prescription.
TOPIC: KINDS OF IMPLIED TRUST; CONSTRUCTIVE TRUST; PRESCRIPTION o Prescription is rightly regarded as a statute of repose whose object is to suppress
PETITIONERS: PATRICIO, MARIA, FRANCISCA, JOSE SINAON - fraudulent and stale claims from springing up at great distances of time and
RESPONDENTS: ANDRES SORONGON ET AL-
 surprising the parties or their representatives when the facts have become obscure · Defendants answered denying the allegations of the complaint and alleging,
from the lapse of time or the defective memory or death or removal of witnesses. as a special defense, that plaintiffs' action has long prescribed.
· The dates are undisputed. It was only in 1964 that Sorongon “woke up”, 40 years · TC: rendered judgment, holding that while a constructive trust in plaintiffs'
after Sinaons’ possession. Sorongon did not prove that Domingo owned the lot favor arose when defendant Gorricho took advantage of the error of the
at all. provincial sheriff in conveying to her the whole of the parcels in question and
o an action for reconveyance of realty, based upon a constructive or implied trust obtained title in herself, the action of plaintiffs was, however, barred by laches
resulting from fraud, may be barred by prescription. The prescriptive period is and prescription.
reckoned from the issuance of the title which operates as a constructive notice. · Contention of Diaz. Gorricho through an error of the provincial sheriff; that
· This is case of a constructive trust arising by operation of law. having been acquired through error, it was subject to an implied trust, as
provided by Article 1456 of the new Civil Code; and therefore, since the trust
10. Diaz V Gorricho is continuing and subsisting, the appellants may compel reconveyance of the
GR NO. L-11229 property despite the lapse of time, specially because prescription does not run
March 29, 1958 against titles registered under Act 496.
By: Yen ISSUE
Topic: Implied Trust; Constructive Trust WON Constructive Trust can be barred by lapse of 10 years? Yes
Petitioners: Manuel Diaz, Constancia Diaz, and Sor Petra Diaz HELD/RATIO
Respondents: Carmen Gorricho and Husband Francisco Aguado · in constructive trusts the rule is that laches constitutes a bar to actions to
Ponente: Reyes, J.B. L., J enforce the trust, and repudiation is not required, unless there is concealment
DOCTRINE: In constructive trusts, the rule is that laches constitutes a bar to actions of the facts giving rise to the trust
to enforce the trusts, and repudiation is not required, unless there is concealment of · In express trusts, the delay of the beneficiary is directly attributable to the
the facts giving rise to the trust. trustee who undertakes to hold the property for the former, or who is linked
in constructive trusts (that are imposed by law) there is neither promise nor fiduciary to the beneficiary by confidential or fiduciary relations. The trustee's
relation; the so-called trustee does not recognize any trust and has no intent to hold possession is, therefore, not adverse to the beneficiary, until and unless the
for the beneficiary; therefore, the latter is not justified in delaying action to recover latter is made aware that the trust has been repudiated.
his property. FACTS · But in constructive trusts (that are imposed by law), there is neither promise
· Carmen Gorricho filed an action against Maria Sevilla(Diaz) in CFI Manila nor fiduciary relation; the so- called trustee does not recognize any trust and
· A writ of attachment was issued and Lots of Sevilla-Diaz was sold at a public has no intent to hold for the beneficiary; therefore, the latter is not justified in
auction which was won by Gorricho and acquired the land. delaying action to recover his property. It is his fault if he delays; hence, he
· Sevilla-Diaz failed to redeem within one year whereupon the sheriff executed may be estopped by his own laches.
a final deed of sale. · we are of the opinion that the judgment of dismissal should be upheld,
· however, the sheriff conveyed to Gorricho the whole of parcels instead of only because the appellants' cause of action to attack the sheriff's deed and cancel
the half-interest of Maria Sevilla therein. the transfer certificates of title issued to the appellees accrued from the year
· April 13, 1937 Gorricho has been the owner and in possession of the land. of issuance and recording, 1937, and appellants have allowed fifteen (15) years
· March 31, 1952 Children of Sevilla-Diaz compel defendants to execute in their to elapse before taking remedial action in 1952.
favor a deed of reconveyance over an undivided one-half interest over the lots Wherefore, the judgment appealed from is affirmed, with costs against appellants.
in question (the share therein of their deceased father Francisco Diaz illegally
conveyed by the provincial sheriff to Gorricho), which defendants were
allegedly holding in trust for them.
 given by law. He relied on Article 1515, giving the vendee a retro the
11. ADILLE v. COURT OF APPEALS right to demand redemption of the entire property.
G.R. NO. L-44546
JANUARY 29, 1988 ISSUE: WHETHER A CO-OWNER CAN ACQUIRE EXCLUSIVE OWNERSHIP OVER THE
BY: JULPHA PROPERTY HELD IN COMMON? NO.
Topic: KINDS OF IMPLIED TRUST
Petitioners: RUSTICO ADILLE HELD:
Respondents: THE HONORABLE COURT OF APPEALS, EMETERIA ASEJO, TEODORICA · A co-owner may exercise the right of repurchase with aspect to his
ASEJO, DOMINGO ASEJO, JOSEFA ASEJO, and SANTIAGO ASEJO share alone. While records show that Rustico redeemed the property,
Ponente: SARMIENTO, J. shouldering the expenses that did not make him the owner of all of it.
· One co-owner may incur necessary expenses; subject to his right to
DOCTRINE: collect reimbursement from the remaining co-owners. There is no
Registration is not equivalent to notice of repudiation when it is done to doubt that redemption of property entails a necessary expense.
defraud the others. The Torrens title cannot be used as shield for fraud. · The result is that the property remains to be in a condition of co-
Redemption of the whole property by a co-owner will not make him owner ownership. While a vendee a retro, under Article 1613 of the Code,
of all of it. Redemption is not a mode of terminating co-ownership. "may not be compelled to consent to a partial redemption”, the
redemption by one co-heir or co-owner of the property in its totality
FACTS: does not vest in him ownership over it.
· The property in dispute belonged to Felisa Alzul who married twice. o Failure on the part of all the co-owners to redeem it entitles
Her child in the first marriage is petitioner Rustico Adille, and her the vendee a retro to retain the property and consolidate title
children in the second marriage were the respondents. thereto in his name.
· In 1939, she sold the property in pacto de retro to third persons with a o The provision does not give to the redeeming co-owner the
3-year repurchase period. However, she died in 1942 without being right to the entire property.
able to redeem the same. During the redemption period (after she · While Rustico's siblings are liable to him for reimbursement as for their
died), Rustico Adille repurchased the property by himself alone at his shares in redemption expenses, he cannot claim exclusive right to the
own expense, and after that, he executed a deed of extra judicial property owned in common. Registration of property is not a means of
partition representing himself to be the only heir and child of his acquiring ownership, but operates as a mere notice of existing title.
mother Felisa. · Article 1456 provides that “if property is acquired through mistake or
· After efforts at compromise had failed, the respondents filed a case for fraud, the person obtaining it is, by force of law, considered a trustee
partition and accounting, claiming that Rustico was only a trustee on of an implied trust for the benefit of the person from whom the
an implied trust when he redeemed the property, and thus, he cannot property comes”.
claim exclusive ownership of the entire property. o Thus, Rustico is said to be a trustee of behalf of respondents.
· TC ruled that Rustico Adille was the absolute owner and not a trustee. · Rustico's pretension that he was the sole heir to the land in the
He dismissed the case and condemned Emeteria to vacate. affidavit of extrajudicial settlement he executed preliminary to the
· CA reversed the decision of the TC. registration betrays a clear effort on his part to defraud his brothers
· Rustico contended that the property devolved upon him because of the and sisters and to exercise sole dominion over the property.
failure of his co-heirs to join him in its redemption within the period · Prescription bars any demand on property owned in common, held by
another co-owner following the required number of years. In any
 event, the state of co-ownership ends. In the case at bar, the property By: Martin
was registered in 1955 by Rustico, solely in his name, while the claim
of respondents was presented in 1974. Doctrine: An action to enforce an implied trust, whether resulting or constructive, may
o HOWEVER, prescription has not set in. be barred not only by prescription but also by laches.
o Prescription, as a mode of terminating a relation of co- FACTS
ownership, must have been preceded by repudiation (of the · Private Respondent B.P. Mata & Co. Inc. (Mata), is a private corporation
co-ownership). It must be subject to certain conditions: engaged in providing goods and services to shipping companies. Since 1966, it has
§ Co-owner repudiates the co-ownership; acted as a manning or crewing agent for several foreign firms, one of which is Star
§ Such act of repudiation is made known to other co- Kist Foods, Inc., USA (Star Kist). As part of their agreement, Mata makes advances
owners. for the crew's medical expenses, National Seaman's Board fees, Seaman's Welfare
§ Evidence is clear and conclusive fund, and standby fees and for the crew's basic personal needs. Subsequently,
§ Co-owner has been in possession through open, Mata sends monthly billings to its foreign principal Star Kist, which in turn
continuous, exclusive and notorious possession of reimburses Mata by sending a telegraphic transfer through banks for credit to the
the property latter's account.
o Rustico has NOT repudiated the co-ownership because he · Against this background, on February 21, 1975, Security Pacific National Bank
deliberately kept the respondents in the dark by feigning sole (SEPAC) of Los Angeles which had an agency arrangement with PNB, transmitted
ownership. a cable message to the International Department of PNB to pay the amount of
· While registration under the Torrens system is constructive notice of US$14,000 to Mata by crediting the latter's account with the Insular Bank of Asia
title, it does not furnish a shield for fraud. The act of registration is and America (IBAA), per order of Star Kist. Upon receipt of this cabled message on
equivalent to notice of repudiation but not to defraud others. February 24, 1975, PNB's International Department noticed an error and sent a
· The right of the respondents commenced from the time they service message to SEPAC Bank. The latter replied with instructions that the
discovered Rustico's act of defraudation (which was during the amount of US$14,000 should only be for US$1,400.
progress of litigation) so prescription is not a bar to this constructive · On the basis of the cable message dated February 24, 1975 Cashier's Check
trust. No. 269522 in the amount of US$1,400 (P9,772.95) representing reimbursement
· Furthermore, prescription is an affirmative defense that must be from Star Kist, was issued by the Star Kist for the account of Mata on February 25,
pleaded either in a motion to dismiss or answer, otherwise it is waived, 1975 through the Insular Bank of Asia and America (IBAA).
but Rustico never raised that defense. · On March 11, 1975, PNB effected another payment through Cashier's Check
No. 270271 in the amount of US$14,000 (P97,878.60) purporting to be another
WHEREORE, there being no reversible error committed by the respondent Court of transmittal of reimbursement from Star Kist, private respondent's foreign
Appeals, the petition is DENIED. The Decision sought to be reviewed is hereby principal.
AFFIRMED in toto. No pronouncement as to costs. · On May 13, 1981, PNB requested Mata for refund of US$14,000 (P97,878.60)
after it discovered its error in effecting the second payment.
· PNB filed a civil case for collection and refund of US$14,000 against Mata
12.) PNB vs. CA arguing that based on a constructive trust under Article 1456 of the Civil Code, it
GR NO. 97995 has a right to recover the said amount it erroneously credited to respondent Mata.
January 21, 1993 · RTC: dismissed the complaint ruling that the case is one of solutio
Petitioner: Philippine National Bank indebiti under A2154 and not constructive trust under A1456.
Respondent: Court of Appeals and B.P. Mata and CO., Inc.
 · CA: affirmed RTC. Under Art. 2154 on solutio indebiti, and PNB can no deprived of a choice, for prescription has effectively blocked the quasi-
longer demand the return of the US$14,000 because its action had contract as an alternative, leaving only constructive trust as the feasible
already prescribed under Art. 1145 par. 2 of CC where actions on quasi- option. However, even assuming that the case constitutes a constructive
contracts must be commenced within six years. PNB, in this case, filed trust and prescription has not set in, the present action has already been
the complaint almost after seven years after it mistakenly paid to Mata. barred by laches.
ISSUE
1. Whether the action seeking to annul the decision of the CA is one under (2) It is a well-settled rule that an action to enforce an implied trust, whether
solutio indebiti under Art. 2154 or constructive trust Art. 1456. resulting or constructive, may be barred not only by prescription but also
2. W/N PNB may still claim reimbursement. by laches.

HELD/RATIO (3) While prescription is concerned with the fact of delay, laches deals with
1.) SOLUTIO INDEBITI the effect of unreasonable delay. It is amazing that it took petitioner
almost seven years before it discovered that it had erroneously paid
(1) The instant case fulfills the requisites on solutio indebiti as defined in Mata. It is unbelievable for a bank, and a government bank at that, which
Article 2154: regularly publishes its balanced financial statements annually or more
(a) that something (in this case, money) has been received when frequently to notice its error only seven years later. As a universal bank
there was no right to demand it; and with worldwide operations, PNB cannot afford to commit such costly
(b) The same was unduly delivered through mistake. There is a mistakes.
presumption that there was a mistake in the payment if
“something which had never been due or had already been paid 13. Vda. De Delgado v. Court of Appeals
was deliverd; but he from whom the return is claimed may 363 SCRA 758
prove that the delivery was made out of liberality or for any AUG. 28, 2001
other just cause.” By: JANINE
(2) In the case at bar, a payment in the corrected amount of US$1,400 had Topic: Kinds of Implied Trusts
already been made by PNB for the account of Mata. Strangely, however, Petitioners: MARIA ALVAREZ VDA. DE DELGADO, CATALINA C. DELGADO, NATIVIDAD
fourteen days later, PNB effected another payment in the amount of D. CLUTARIO, ANTONIA DELGADO, FLORINTINO DELGADO, PACIENCIA D. CAZORLA,
US$14,000 this time purporting to be another transmittal of GLORIA D. SOTIANGCO, JOSE DELGADO, JR., MARLENE D. SENNER, JOEL DELGADO,
reimbursement from Star Kist. MARISSA DELGADO, JESUS DELGADO, JANICE DELGADO, VICTORINO DELGADO, and
JUAN DELGADO
CONSTRUCTIVE TRUST- Enforceable by a proceeding in equity to compel the defendant Respondents: HON. COURT OF APPEALS and REPUBLIC OF THE PHILIPPINES
to surrender specific property. (Prescriptive Period of 10 Years) Ponente: QUISUMBING, J.
____________________________________________________________________
SOLUTIO INDEBITI- Gives rise to a personal liability ordinarily enforceable by an action SUMMARY: In 1936, Carlos Delgado donated a parcel of land in Samar to the
at law.( Prescriptive Period of 6 Years) Commonwealth of the Philippines. The Deed of Donation contained the condition that
2.) No the land shall be used as military reservation for training cadres or for such other uses
of the Philippine, provided that when the Philippines no longer needs this parcel of
(1) While petitioner PNB may indeed opt to avail of an action to enforce a land for any military purposes, then said land shall automatically revert to the donor
constructive trust or the quasi-contract of solutio indebiti, it has been or its heirs or assigns. The done then caused the property (and other properties that
were donated for similar purposes) to be surveyed, with a view to having it registered ● The Deed of Donation states as reason or consideration the donor's desire
in the name of the Commonwealth of the Philippines. Upon approval of the application to contribute to the formation of the National Defense of the Philippines. It
for registration, the parcels of land donated by Carlos Delgado and others became contained the following condition:
identified as Lot No 1. But Lot No. 1 showed that it has an excess of 33,607 sq. meters o The parcel of land shall be used as military reservation for training
from the total area of the parcels actually donated. Such apparent excess came from cadres or for such other uses of the Philippine, provided that when the
the neighboring parcels of land also owned by Carlos Delgado. Upon declaration of Philippines no longer needs this parcel of land for any military
independence on July 4, 1946, the Commonwealth of the Philippines was replaced by purposes, then said land shall automatically revert to the donor or its
the Republic of the Philippines, which took over the subject land and turned portions heirs or assigns.
of it over to the then Civil Aeronautics Administration. Said government agency has ● The donee promptly occupied the donated land and constructed buildings
since utilized the land in question as a domestic national airport, with some portions thereon for military purposes, such as a military training campsite.
rented to the Philippine Airlines, and some to the provincial government for a capitol ● Further, after entering into physical possession of the land and making the
site and a hospital site, and for some other uses which clearly are not military in nature. said improvements, the donee caused the property (and other properties
In 1989, petitioners filed an action for the reconveyance of the lands. RTC ruled in favor that were donated for similar purposes) to be surveyed, with a view to
of petitioners. CA reversed the RTC ruling. SC held that the action for reconveyance of having it registered in the name of the Commonwealth of the Philippines.
the excess of 33,607 square meters mistakenly included in the OCT has already ● Upon approval of the application for registration with CFI Samar, the parcels
prescribed. The said excess portion of petitioners' land was mistakenly registered in of land donated by Carlos Delgado (165,000 sq. m.) and others became
the name of the Commonwealth of the Philippines on September 9, 1939, still identified as Lot No 1.
petitioners were admittedly aware of this fact. An action for reconveyance of ● But Lot No. 1 showed an area of 216,907 square meters, apparently with an
registered land based on an implied trust prescribes in ten years and it is from the date excess of 33,607 square meters from the total area of the parcels actually
of issuance of such title that the effective assertion of adverse title for purposes of the donated.
statute of limitations is counted. ● Such apparent excess came allegedly from the neighboring parcels of land
also owned by Carlos Delgado.
____________________________________________________________________ ● In February 1939, the CFI Samar decreed that on the basis of more than
DOCTRINE: An action for reconveyance of registered land based on an implied trust forty years of quiet, peaceful and continuous possession by the donors and
prescribes in ten years and it is from the date of issuance of such title that the their donee, and after finding a general default of opposition to the
effective assertion of adverse title for purposes of the statute of limitations is application for registration, the aforesaid parcels of land as well as the
counted. improvements thereon, were to be registered in the name of the
Commonwealth of the Philippines as absolute owner thereof.
FACTS: ● Pursuant to the CFI order, an OCT was issued by the Register of Deeds. The
● During his lifetime, Carlos Delgado was the absolute owner of a parcel of OCT contained an annotation of the express condition attached to the land
land in Catarman, Samar. donated by Carlos Delgado.
● In October 1936, Carlos granted and conveyed, by way of donation or gift ● Subsequently, said OCT was later cancelled and replaced with TCT.
with quitclaim, all his rights, title, interest, claim and demand over a portion ● It appears, however, that said TCT did not contain an annotation of the
of said land in favor of the Commonwealth of the Philippines or its condition originally found in the Deed of Donation.
successors. ● Upon declaration of independence on July 4, 1946, the Commonwealth of
● Acceptance was made by then President Manuel L. Quezon. the Philippines passed out of existence. It was replaced by the existing
Republic of the Philippines, which took over the subject land and turned
 portions of it over to the then Civil Aeronautics Administration (CAA), later upon the title so acquired the character of a constructive trust for the real owner,
renamed Bureau of Air Transportation Office (ATO). which would justify an action for reconveyance. However, it is now well-settled that
● Said government agency has since utilized the land in question, or portions an action for reconveyance of registered land based on an implied trust prescribes in
of it as a domestic national airport, with some portions rented to the ten years and it is from the date of issuance of such title that the effective assertion
Philippine Airlines, and some to the provincial government for a capitol site of adverse title for purposes of the statute of limitations is counted.
and a hospital site, and for some other uses which clearly are not military in Granting that in the present case, the said excess portion of petitioners'
nature. land was mistakenly registered in the name of the Commonwealth of the Philippines
● A petition for reconveyance was filed in December 1970, alleging as ground on September 9, 1939, still petitioners were admittedly aware of this fact. The
therefor the violation of the express condition imposed by the donor. It was issuance of the OCT on said date stating the total area included should have apprised
also during this time that Jose Delgado, brother and lone heir of the donor, them, even constructively, that a portion of their land was mistakenly claimed by the
Carlos, obtained a court order, directing the insertion of the automatic donee, respondent Republic's predecessor-in-interest. Petitioners should have taken
reversion clause as an annotation in the TCT. appropriate legal action seasonably, within the ten years prescriptive period. Since
● Due to the plaintiff's failure to prosecute, the case for reconveyance was petitioners filed their action belatedly, we find that they have also lost any right to
eventually dismissed by the lower court without prejudice in September the aforesaid portion of land consisting of 33,607 square meters.
1983.
● In 1989, the heirs of Jose Delgado sent letters to the different agencies WHEREFORE, the petition for review is DENIED and the appealed decision of the
occupying the subject property, inviting their attention to the donation and Court of Appeals in CA-G.R. CV No. 36923, dated June 14, 1996, is hereby AFFIRMED.
the violation of the condition imposed therein. No pronouncement as to costs.
● No settlement or understanding was reached, such that the widow and
surviving heirs of Jose Delgado filed a new action for reconveyance with the 14 SPS BEJOC v CABREROS
RTC of Catarman, Northern Samar in September 1989. G.R. No. 145849
● RTC ruled in favor of the petitioners and ordered the defendant to reconvey DATE: July 22, 2005
in favor of the plaintiffs the ownership and possession of the portions of the By: Jus
land in question. Topic: Implied Trust
● CA reversed the RTC ruling. Petitioner: SPOUSES JOSE BEJOC and JOVITA CAPUTOL BEJOC
Respondents: PRIMA CALDERON CABREROS and COURT OF APPEALS
ISSUE: WON petitioner’s action for reconveyance of the excess portion of Lot 1 has Ponente: Corona, J.
already prescribed.
SUMMARY: 2 parcels of land are owned by Caputol who then donated such to her son,
HELD: YES. husband of herein resp Bareros. When resps flew to Hawaii they made pets Bejoc as
With regard to the alleged excess of 33,607 square meters mistakenly the administrators of the land because of their close ties, pet Bejoc being the sister of
included in the Original Certificate of Title, we also find in order the ruling of the Caputol (Auntie of the husband of resp Cabreros). In 1980, Pets had the titles of the
Court of Appeals that the action for its reconveyance has likewise prescribed. land registered under their name. In 1990, when resp Cabreros went back in the PH
Article 1456 of the Civil Code states, "If property is acquired through she found out of the act of pets hence she filed a case against them. Pets contended
mistake or fraud, the person obtaining it is, by force of law, considered a trustee of that the action of resp is already prescribed since the prescriptive period of actions
an implied trust for the benefit of the person from whom the property comes." In the based on fraud 4 years committed. Hence the issues. The SC said that there was
case of Bueno vs. Reyes, we held that registration of property by one person in his constructive implied trust because of the fraudulent act of pets of registering the land
name, whether by mistake or fraud, the real owner being another person, impresses under their names despite knowing that they are only caretakers. Also, the action for
reconveyance of resp Cabreros is not yet expired considering that the action is an fraud 1. WON THERE WAS AN IMPLIED (CONSTRUCTIVE) TRUST BETWEEN PET BEJOC
under implied trust. Hence, since resp filed after 6 years from fraudulent registration AND CABREROS? YES!
of the land, it is well within the 10 years prescriptive period of fraud under implied 2. WON THE ACTION FOR RECONVEYANCE OF RESP CABREROS IS ALREADY
trust. Resp won. BARRED Y PRESCRIPTION? NO

DOCTRINE: In Thomson v. Court of Appeals , we held that a trust arises in favor of one HELD:
who pays the purchase price of a property in the name of another, because of the FIRST ISSUE
presumption that he who pays for a thing intends a beneficial interest for himself. 7. A constructive trust is created, not by any word evincing a direct intention to
create a trust, but by operation of law in order to satisfy the demands of justice
FACTS and to prevent unjust enrichment. It arises contrary to an agreement or intention
1. The original owner of the disputed parcels of land was Maura Caputol, the against one who, by fraud, duress or abuse of confidence, obtains or holds the
mother-in-law of respondent. Maura Caputol executed a deed of donation in legal right to property which he ought not, in equity and good conscience, to hold
favor of her son, Domingo Cabreros. The latter accepted the donation in the same 8. In the case, Records show that, while the properties were under their
instrument. administration, they transferred the tax declarations in the name of Domingo
2. Domingo and his wife, respondent Prima Cabreros, took physical possession of Cabreros to Maura Caputol on the basis of a fake quitclaim purportedly executed
the lots. In 1976, they had the tax declarations in the name of Maura Caputol in 1971. These tax declarations were in turn transferred to petitioner Jovita
cancelled and transferred to them. Caputol on the strength of a fraudulent deed of confirmation of sale supposedly
3. When the new owners and Maura Caputol migrated to Hawaii, they left the executed by Maura Caputol on May 18, 1984. Hence, there was implied trust
charge and administration of the land to petitioner spouses. Aside from being the from the fraud which tantamounted to a constructive trust
uncle and aunt of Domingo, they were chosen as caretakers because they had
been the overseers of the properties even before the donation to Domingo. SECOND ISSUE
4. In 1984, parcel 1 and parcel 2, both in the name of Maura Caputol, were 9. The right to seek reconveyance based on an implied or constructive trust is not
cancelled, respectively. These new declarations were now in the name of absolute. It is subject to extinctive prescription which is 10 years.
petitioner Jovita Caputol, based on a deed of confirmation of sale dated 1984 10. In the case, the 4-year prescriptive period is not applicable in the present case
annotated therein. This document was allegedly executed by Maura Caputol in because the action was not based exclusively on fraud but on implied trust.
favor of petitioner Jovita (Maura Caputol’s younger sister) 11. This period is reckoned from the date of the issuance of the original certificate of
5. Consequently, the respondent filed an action for reconveyance against the title or transfer certificate of title. Since such issuance operates as a constructive
petitioner spouses on 1990 notice to the whole world, the discovery of the fraud is deemed to have taken
6. CONTENTION OF PETS: Petitioner spouses contend that respondent's action for place at that time.
reconveyance was based on fraud, not implied trust. Respondent's allegation was 12. Here, the title was issued on October 17, 1984. The action for reconveyance was,
that petitioner spouses conspired to transfer the declarations in their names and on the other hand, filed 6 years later, on February 1, 1990. Clearly, prescription
obtained title for the parcels of land by fabricating the quitclaim, contract of sale had not yet attached. The suit was brought well within the 10-year prescriptive
and deed of confirmation of sale. Since the fraud committed by petitioners — not period for implied trusts.
implied trust — was the basis of the action, the prescriptive period was 4 years
and not 10 years RULING: WHEREFORE, the petition is hereby DENIED. The assailed decision and
resolution of the Court of Appeals are hereby AFFIRMED in toto. Costs against
ISSUE: petitioners. SO ORDERED.
 15. Homena V. Casa + Castor · the plaintiffs' supposed cause of action rests upon the deed of sale executed
GR NO. L-32749 by defendants in their favor on June 15, 1962 wherein the latter sold a two-
January 22, 1988 hectare portion of the homestead which they were applying for to the
Enzo plaintiffs on the understanding that the actual conveyance of the said portion
Topic: Implied Trust to plaintiffs would be made only after the lapse of the five-year period during
Petitioners: SABAS H. HOMENA and ILUMINADA JUANEZA which, under the Public Land Act, the homestead owner was prohibited from
Respondents: DIMAS CASA AND MARIA CASTOR and the REGISTER OF DEEDS FOR transferring his rights.
THE PROVINCE OF COTABATO · The agreement is clearly illegal and void ab initio; it is intended to circumvent
Ponente: YAP, J and violate the law. As parties to a void contract, the plaintiffs have no rights
DOCTRINE: Doctrine of implied trust based on an illegal contract cannot be invoked. which they can enforce and the court can not lend itself to its enforcement.
The issue of prescription or laches becomes irrelevant in a case where plaintiffs · Plaintiffs can neither invoke the doctrine of implied trust based on an illegal
clearly have no cause of action. contract. The issue of prescription or laches becomes irrelevant in a case such
as this, where plaintiffs clearly have no cause of action.
FACTS WHEREFORE, the petition is hereby DENIED and the orders appealed from are
· Homena and Juaneza alleged unlawful acts of dispossession disturbing their AFFIRMED.
peaceful, continuous, open, uninterrupted adverse and public possession of the
property in question. Plaintiffs sought to annul the original certificate of title issued 16. SALTIGA DE ROMERO V CA AND LUTERO ROMERO
by the Register of Deeds for the province of Cotabato in favor of defendant spouses REFERENCE NO. & DATE
pursuant to a Homestead Patent on the ground that said patent was obtained by By: Iñigo Untalan
defendant spouses through fraud and misrepresentation by stating, among others, Topic: Implied Trusts
in their application, that the lot was not claimed and occupied by another person. Petitioners:SALTIGA DE ROMERO
· Plaintiffs alleged that on June 15, 1967 they purchased from the defendants two (2) Respondents: COURT OF APPEALS AND LUTERO ROMERO
hectares of parcel of land, it being agreed in the deed of sale that the said portion Ponente:
would be reconveyed to plaintiffs after the five-year prohibitory period, as provided DOCTRINE:
for in the Homestead Patent Law, shall have elapsed, and that defendants failed to General Rule:To prevent unjust enrichment in circumstances arising from fraud, a trust
abide by said agreement. will be created between the defrauder and the party defrauded. [constructive trust]
· Defendants moved to dismiss the complain saying that complaint is barred by Exception:A trust will not be created if it is for the purpose evading or circumventing
prescription, since thirteen years had elapsed from the issuance of the homestead the law.
patent before the action was filed; plaintiff has no cause of action, and that plaintiff
is not the proper party to institute the action to annul the homestead patent. FACTS:
· Plaintiff: Because of such fraud, the action of the plaintiffs cannot be deemed to · Eugenio Romero bought from spouses Celedonio Jaug and Sofia Macan the
have prescribed, since such action can be brought within four (4) years from latter’s “rights, interest, participation, ownership and possession” of 12
discovery of the fraud. Moreover, the defense of prescription can not be set up in hectares of land. The land in question was then public land.
an action to recover property held in trust by a person for another. · Eugenio then applied for a homestead patent for the land but was disapproved
· Court a quo dismissed the complaint. by the Bureau of Lands because it appears that Eugenio already had applied
ISSUE for a homestead patent for 24 hectares and was disqualified from owning the
WON there is Implied trust on an illegal contract? NO additional 12 hectares. [Public Land Act limits homesteads to 24hec]
HELD/RATIO
 · Eugenio then placed the application in the name of Eutiquio [Lutero’s bro], Brothers and sisters) NO.
allegedly in trust for all the children of Eugenio. When Eutiquio got married
and had children, his [wonderful] brothers and sisters got worried that his HELD:
heirs may claim the land so the application was transferred in the name of · Lengthy discussion here of
Lutero who was then still single. o What a trust is
· When Lutero got married, he supposedly relinquished the application in favor o It can be express or implied, and
of his younger brother Ricardo through an instrument dated July 5, 1952. o Implied trust is either resulting or constructive trust
· In 1969,Lutero was brought to the office of the mayor, where he found his o NOTE: Did not put anymore because it’s the same in other
mother and his forever-loving siblings. He testified that when he arrived at previous cases
the office, he was presented three (3) affidavits for his signature. That the
affidavits were to the effect that he sold three (3) hectares each out of the 12 · Constructive trusts are created by the construction of the equity in order to
hectares of land to the petitioners. He testified that he told the mayor that satisfy the demands of justice and prevent unjust enrichment
he was not selling the parcels of land due to the fact that the prohibition o They arise contrary to intention against one who, by fraud or
period of 5 years had not yet elapsed. He refuted the affidavits duress or abuse of confidence, obtains or hold the legal right to
· Lutero claims that as early as 1940-1941 he had already been in occupancy of property, which he our not hold
the 12 hectares in question and that the land had been titled in his name even · At the outset, petitioners did not present any evidence to prove the existence
while his father Eugenio was still alive. [it actually appears that the title to of the trust
the land, had been issued to “Lutero Romero” as early as April 26, 1967,after o They merely alleged that Lutero, through fraudulent means, had
the homestead patent was issued in his favor on April 7, 1967. the title issued in his name contrary to the alleged agreement
· He said that his three (3) sisters occupied portions of the property only in within the family that he would merely hold the lot in trust for
1969, after he was forced to sign the affidavits. the benefit of his brothers and sisters.
· A case was then instituted against Lutero. · BUT even assuming that they duly proved the existence of the trust, the
· [somewhere here it was mentioned that Lutero mortgaged the land to DPB validity of that trust would be doubtful validity considering that it would
for his agri loan. But not really relevant to the issue] promote a direct violation of the provisions of the Public Land Act as regards
· TC ruled in favor of Lutero, declaring the 3 affidavits null and void. the acquisition of a homestead patent
· CA: also for Lutero but also took notice of the fact that Lutero himself, applied · A homestead applicant is required by law to occupy and cultivate the land for
for a Homestead patent, which was granted after compliying with all the his own benefit, and not for the benefit of someone else
requirements of the law. That petitioners have not established that there was o Under Sec 12 of The Public Land Act, a person is allowed to enter
any fraud committed in this application. There was even a hearing conducted a homestead not exceeding 24 hectares
by the Bureau of Lands on the application indicating that it was under his o In the present case, it is not disputed that Eugenio already
name, and not of Ricardo as petitioners posit. Under the presumption of law, applied for a homestead patent for 24 hectares so he was
that official duty has been regularly performed, there is no ground to disqualified from applying for an additional 12. (Already
question the grant to Lutero Romero in 1967. Furthermore, Lutero could not circumspect by itself)
have sold the land, even if it was to his sisters because the only exception to · If petitioner’s theory that a trust in fact existed is upheld, Court would be
the 5 year prohibition to alienate the land under the Public Land Act, is it is in abetting a circumvention of the statutory prohibitions stated under the Public
favor of the Government. Land Act.

ISSUE: Whether Lutero held the land in trust for the benefit of Eugenio’s heirs (his DISPOSITIVE: Lutero won.
 · On 18 March 1992, Ramon Yap sold the land and his share of the 3-door
17. HEIRS OF YAP vs. CA apartment to his brother, his herein co-respondent Benjamin Yap, for the sum of
GR # 133047 P337,500.00
DATE: AUG 17, 1999 · Petitioners sent a letter to the respondents of the former's claim of
By: YRREVERRE ownership over the property and demanded that respondents execute the proper
Topic: IMPLIED TRUST deed necessary to transfer the title to them.
Petitioners: HEIRS OF LORENZO YAP, namely SALLY SUN YAP, MARGARET YAP-UY · Respondents filed an action with the RTC for quieting of title against
and MANUEL YAP petitioners.
Respondents: CA, RAMON YAP and BENJAMIN YAP · Petitioners averred that sometime in 1966 the spouses Nery offered to sell
Ponente: VITUG, J. the parcel of land to Lorenzo Yap. Since Lorenzo and his wife Sally Yap were at that
time Chinese citizens, Lorenzo requested his brother Ramon to allow the use of
DOCTRINE: the latter's name in the to purchase and register the lot to which Ramon Yap
1. The doctrine of clean hands will not allow the creation or the use of a juridical consented.
relation, a trust whether express or implied included, to perpetrate fraud or · It was agreed that the property would remain registered in the name of
tolerate bad faith nor to subvert, directly or indirectly, the law. Ramon Yap until such time as Lorenzo would have acquired Philippine citizenship
2. One basic distinction between an implied trust and an express trust is but that, should Lorenzo die, the lot would then be transferred to Lorenzo's heirs
that while the former may be established by parol evidence, the latter upon their naturalization.
cannot: Even then, in order to establish an implied trust in real property · Petitioners contended that it was Lorenzo who had caused the construction
by parol evidence, the proof should be as fully convincing as if the acts of the apartment on the property, merely entrusting the money to Ramon Yap.
giving rise to the trust obligation are proven by an authentic document. · The death of Lorenzo in 1970 prompted petitioners to move in and occupy
An implied trust, in fine, cannot be established upon vague and the apartment and the lot, without any objection from Ramon and Benjamin.
inconclusive proof. · In 1991, petitioners acquired Philippine citizenship and, they requested
Ramon Yap to have the title to the lot transferred to their names but to they
FACTS: discovered that Ramon had sold the lot to his co-respondent Benjamin.
· Ramon Yap purchased a parcel of land in Quezon City from the spouses Nery. · RTC - found for the respondents and adjudged Benjamin Yap to be the true
He also declared the property in his name for tax purposes and paid the real estate and lawful owner of the disputed property.
taxes. · CA - Affirmed
· In 1967, Ramon Yap constructed an apartment building for the use of the Yap
family. 1/5 of the cost of the construction was defrayed by Ramon Yap while the ISSUE: W/N there was a trust agreement between Lorenzo and his brothers Ramon &
rest was shouldered by Chua Mia, the mother of Lorenzo, Benjamin and Ramon. Benjamin? No, it was not fully proven.
· Upon its completion, the improvement was declared for real estate tax
purposes in the name of Lorenzo Yap in deference to the wishes of the old woman. HELD/RATIO:
(Chua Mia) · One basic distinction between an implied trust and an express trust is that
· Lorenzo Yap died. A few months later, his heirs (herein petitioners) left their while the former may be established by parol evidence, the latter cannot. Even
family dwelling in Lucena City to reside permanently in Manila. Ramon Yap then, in order to establish an implied trust in real property by parol evidence, the
allowed petitioners to use one unit of the apartment building. proof should be as fully convincing as if the acts giving rise to the trust obligation
are proven by an authentic document. An implied trust, in fine, cannot be
established upon vague and inconclusive proof.
 · Unfortunately for petitioners, the issues they submit in the case at bar boil September 3, 2004
down to the appreciation of the evidence presented. The Court of Appeals, By: Benitez
sustaining the court a quo, has found the evidence submitted by petitioners to be
utterly wanting, consisting mainly of the self-serving testimony of Sally Yap. She Topic: Implied Trust
herself admitted that the business establishment of her husband Lorenzo was Petitioners: Felomina Abellana
razed by fire in 1964 that would somehow place to doubt the claim that he indeed Respondents: Spouses Romeo Ponce and Lucila Ponce and the Register of Deeds of
had the means to purchase the subject land about two years later from the Nery Butuan City
spouses. Upon the other hand, Ramon Yap was by then an accountant with Ponente: Ynares-Santiago
apparent means to buy the property himself. At all events, findings of fact by the
Court of Appeals, particularly when consistent with those made by the trial court, DOCTRINE: The concept of implied trusts is that from the facts and circumstances of
should deserve utmost regard when not devoid of evidentiary support. No cogent a given case, the existence of a trust relationship is inferred in order to effect the
reason had been shown by petitioners for the Court to now hold otherwise. presumed intention of the parties. One of the recognized exceptions to the
· the long standing and broad doctrine of clean hands that will not allow the establishment of an implied trust is where a contrary intention is proved.
creation or the use of a juridical relation, a trust whether express or implied
included, to perpetrate fraud or tolerate bad faith nor to subvert, directly or FACTS:
indirectly, the law. The trust agreement between Ramon and Lorenzo, if indeed ● On July 15, 1981, Felomina, a spinster, pharmacist and aunt of private
extant, would have been in contravention of, in fact, the fundamental law. Then respondent Lucila Ponce, purchased from the late Estela Caldoza-Pacres a
Section 5, Article XIII, of the 1935 Constitution has provided that — 44,297 square meter agricultural lot with the intention of giving said lot to
o "Save in cases of hereditary succession, no private agricultural land shall be her niece, Lucila.
transferred or assigned except to individuals, corporations, or associations qualified to ● Thus, in the deed of sale, Lucila was designated as the buyer of the said lot
acquire or hold lands of the public domain in the Philippines." located at Los Angeles, Butuan City. The total consideration of the sale was
· The mandate has also been adopted in Section 14, Article XIV, of the 1973 P16,500.00, but only P4,500.00 was stated in the deed upon the request of
Constitution and now reiterated under Section 7, Article XII, of the 1987 the seller.
Constitution. A trust or a provision in the terms of a trust would be invalid if the ● Subsequently, Felomina applied for the issuance of title in the name of her
enforcement of the trust or provision is against the law even though its niece. On April 28, 1992, a TCT over the subject lot was issued in the name of
performance does not involve the commission of a criminal or tortuous act. It Lucila. Said title, however, remained in the possession of Felomina who
likewise must follow that what the parties are not allowed to do expressly is one developed the lot and paid real property taxes thereon.
that they also may not do impliedly as, for instance, in the guise of a resulting ● The relationship between Felomina and respondent spouses Romeo and
trust. Lucila Ponce, however, turned sour. The latter allegedly became disrespectful
and ungrateful to the point of hurling her insults and even attempting to hurt
RESPONDENTS WON. her physically. Hence, Felomina filed the instant case for revocation of
implied trust to recover legal title over the property.
WHEREFORE, the instant petition is DENIED, and the decision of the respondent Court ● Private respondent spouses Lucila, also a pharmacist, and Romeo, a marine
of Appeals of 08 January 1998 in C.A.-G.R. CV No. 46838 is AFFIRMED. Costs against engineer, on the other hand, claimed that the purchase price of the lot was
petitioners. only P4,500.00 and that it was them who paid the same.
● TC: Rendered a decision holding that an implied trust existed between
18. Abellana v. Ponce Felomina and Lucila, such that the latter is merely holding the lot for the
GR NO. 160488
 benefit of the former. It thus ordered the conveyance of the subject lot in the case at bar is therefore legally inexistent and an action for the declaration of the
favor of Felomina. inexistence of a contract does not prescribe. Hence, Felomina can still recover title
● CA: Set aside the decision of the trial court ruling that Felomina failed to from Lucila.
prove the existence of an implied trust and upheld respondent spouses
ownership over the litigated lot. The appellate court further held that even 19 Perez v Araneta
assuming that Felomina paid the purchase price of the lot, the situation falls Topic: Trust: proceeds from sale of property held in trust
within the exception stated in Article 1448 of the Civil Code which raises a February 27, 1962
disputable presumption that the property was purchased by Felomina as a Shang
gift to Lucila whom she considered as her own daughter.
Petitioners: Trusteeship of the Minors Benigno, Angela, and Antonio all surnamed
ISSUE: Who, as between Felomina and respondent spouses, is the lawful owner of the Perez y Tuason, Antonio M. Perez
controverted lot? Respondents: J. Antonio Araneta

RULING: Felomina is the lawful owner of the lot. Doctrine: The profits realized in the sale of trust properties are part of the capital held
Article 1448 of the Civil Code on implied trust finds no application in the instant case. in trust, to which the beneficiaries are not entitled as income.
The concept of implied trusts is that from the facts and circumstances of a given case,
the existence of a trust relationship is inferred in order to effect the presumed Facts:
intention of the parties. Thus, one of the recognized exceptions to the establishment 1. Sometime in 1948, Angela Tuason died leaving a will (written in spanish)
of an implied trust is where a contrary intention is proved, as in the present case. 2. In conformity with the will, the present trusteeship proceedings was
instituted and certain properties of the estate of the deceased, valued
From the testimony of Felomina herself, she wanted to give the lot to Lucila as a gift. P900,000 were turned over in 1950 to J. Antonio Araneta, as trustee for the
To her mind, the execution of a deed with Lucila as the buyer and the subsequent benefit of Benigno, Angela and Antonio, all minors and the grandchildren of
issuance of title in the latter’s name were the acts that would effectuate her the decedent.
generosity. In so carrying out what she conceived, Felomina evidently displayed her 3. Portions of the properties were sold for a total of P98,828.88
unequivocal intention to transfer ownership of the lot to Lucila and not merely to 4. The judicial guardian and father of said minors filed a motion in the
constitute her as a trustee thereof. It was only when their relationship soured that she trusteeship proceedings alleging that the sum of P98828.88 represents
sought to revoke the donation on the theory of implied trust, though there is nothing profits or income of the trusteeship to which the said minors are entitled and
to revoke because the donation was never perfected. prayed that the trust deliver the sum to the movant
5. However, the trustee objected the motion. This motion was denied, from
In the instant case, what transpired between Felomina and Lucila was a donation of an which the guardian appealed.
immovable property which was not embodied in a public instrument as required by
the Civil Code. Being an oral donation, the transaction was void. Moreover, even if Issues: Whether P98,828.88 is a profit or income which should be turned over to the
Felomina enjoyed the fruits of the land with the intention of giving effect to the guardian of said minors? NO
donation after her demise, the conveyance is still a void donation mortis causa, for
non-compliance with the formalities of a will. Held: WHEREFORE, the order appealed from is hereby affirmed, with costs against
appellant, Antonio M. Perez.
Unlike ordinary contracts, solemn contracts like donations are perfected only upon 1. Whether or not the minors for whom property is held in trust, are entitled to
compliance with the legal formalities under Articles 748]and 749. The oral donation in the delivery of the sum is a matter dependent exclusively upon the conditions
 upon which said trust had been established, as provided in the deceased’s
will, which in turn depend’s upon the deceased’s intent. However, the
question whether the said proceeds constitute profits or not within the
purview of the internal revenue laws depends upon the provision of the
latter, regardless of the will of the decedent.
2. The proceeds of the sale of portions of the real estate held in trust, merely
take the place of the property sold. The provision of the will of the decedent
explicitly authorizing the trustee to sell the property held in trust and to
acquire, with the proceeds of the sale, other property, leaves no room for
doubt about the intent of the testatrix to keep, as part of the trust, said
proceeds of the sale, and not to turn over the same over to the beneficiary
as net rentals
3. Thirdly, under the principles of the general law on trust, insofar as not in
conflict with the Civil Code, the Code of Commerce, the Rules of Court and
Special laws, are now part of our laws (Article 1442).
4. Pursuant to the general law on trust, “a provision in the instrument that the
beneficiary shall be entitled to the ‘income and profits’ of the trust estate is
not ordinarily sufficient to indicate an intention that he should be entitled to
receive gains arising from the sale of trust property”
Lastly, profits realized in the sale of trust properties are part of the capital held in
trust, to which the beneficiaries are not entitled as income